Finance Minister Jim Flaherty concedes that job creation in this country will be “modest” at best this year. But a spokesman for a major workforce consultancy group goes even further, saying the employment market is actually “flat-lining.”

Byrne Luft, vice-president of operations at Manpower Canada, blames poor productivity, a skills mismatch and high labour costs for many of our problems.

In its fourth-quarter employment outlook survey, released Tuesday, Manpower said Canadian companies also see only a “mild” hiring climate ahead.

Of the 1,900 Canadian firms polled, 74% said they expect to keep staffing at current levels between October and December, while 8% plan to cut staff. Another 16% responded they plan to increase payrolls, and another 2% have yet to decide either way.

“We’re doing nothing with employment in Canada,” Mr. Luft said in an interview. “Nothing is happening. Employment numbers are like a roller coaster — especially over the summer.

“We are not as productive as we need to be. We’re just flat-lining from an employment perspective. There’s just not enough job creation in Canada.”

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Where there are signs of life, they can be found in the construction sector.

Those companies, more than ever in the past year, are cranking up their hiring activity. Twenty-one percent see a strong hiring climate in the fourth quarter, up four percentage points from the previous three-month period and eight percentage points higher than the same time last year.

“Construction has definitely pulled ahead from all the other industry sectors,” Mr. Luft said.

“It’s not surprising. There’s still a lot of capital investment going on right across Canada, specifically Western Canada. A lot of it has to do with foreigners coming to Canada and driving their investments here.”

Other industries are also feeling positive — such as transportation and public utilities, with 17% planning to take on new staff. Likewise, 14% of finance, insurance and real estate operators expect to hire in the fourth quarter, with 11% of services-sector companies also looking to beef up their payroll — though that is unchanged from the third-quarter outlook.

Ten percent of employers in wholesale and retail trade also plan to hire, compared to 7% in both public administration and mining. Education intentions at more modest at 4%, Manpower said.

The sick sector, however, remains manufacturing.

“Manufacturing, globally, is actually increasing. So, China’s manufacturing, India’s manufacturing, Mexico’s manufacturing are seeing demand. There is growth there. But when you are in high-cost, low-production regions like Canada, it does motivate employers and businesses to move into other jurisdictions,” Mr. Luft said.

“If you look at that sector, it’s more economical to move your manufacturing business to the U.S. than it is [to operate] from Canada — by a long shot. So, the manufacturing sector in Canada is just clunking along, is just sputtering along. And it continues to have significant demands on its cost structure because of labour dollars, for the most part.”

Still, Mr. Luft adds that demand for durable manufactured goods in Canada has not taken “so much of a hit,” because auto sales have remained steady.” Hiring intentions in that sector were up a respectable 11%, Manpower said.

Across the country, Western Canada is expected to have the most favourable hiring climate in the fourth quarter, with 16% of companies likely to increase staff. Eleven percent of employers in Atlantic Canada plan to do the same thing, while Ontario firms were less inclined, at 9%, and Quebec employers are looking for only modes gains.

“The talent mismatch is now a term that is being overused, but it’s true,” with unemployed or under-employed people “that don’t match the skills that employers are looking for,” Mr. Luft said.

“Simply said, we need to overhaul the education system and also the culture of Canadians as to where the jobs are. “

Mr. Flaherty, the finance minister, said Monday that Canada still has “the strongest employment growth among G-7 countries,” adding “over one million new jobs since the end of the recession in July 2009.”

“We can’t ignore what’s going on in other parts of the world, of course, the weakness that we see in other economies, particularly in Europe.,” he told reporters in Ottawa.

Asked if he was concerned with the recent huge swings in monthly employment numbers, he responded: “I think it’s dangerous to just look at month-to-month number from anybody, including Statistics Canada, in order to get an indication of what is going on in the economy. I think it’s important to look at longer periods of time.

“We anticipate modest economic growth this year and modest job creation . . . and I think we’re seeing that,” he said. ”We are on track to balance the budget, so I’m comfortable where we are.”

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